2016 (7) TMI 1027 - AT - Central Excise

Availing cenvat credit after 6 months from the date of receipt - Held that - it does not appeal to common sense how the genuine credit available should be denied when appellant shows that every claim was within six months of receipt of subsequent invoice and scheme of modvat is that credit is allowable when the goods are received in the factory. - credit cannot be denied.

Summary

Issues:
1. Dispute on limitation in respect of return of goods on which Modvat credit was taken and reversed.
2. Allegation regarding the limitation period for taking credit on subsequent invoices.
3. Technical defects raised by Revenue on certain invoices leading to a demand.
4. Reckoning of limitation period for taking credit on subsequent invoices.
5. Denial of credit based on technical defects.
6. Application of substantive justice over technicalities in the case.

Analysis:

1. The first issue involves a substantial demand related to the dispute on limitation concerning the return of goods where Modvat credit was taken and reversed. The Revenue raised a dispute on the timing of taking credit subsequently, arguing that it was not within the prescribed 6-month period from the date of the original invoice. The appellant contended that the disallowances were covered by specific documents in the appeal folder.

2. Regarding the second issue, the appellant proved that they had taken credit properly on genuine invoices at the time of receipt of goods and subsequently on duty paid invoices upon rectification of defects. The Revenue's contention on the limitation period was found contrary to law, as the appellant had taken credit within the stipulated time from the subsequent invoice date, not the original invoice date.

3. The third issue pertains to a demand of a specific amount concerning technical defects raised by Revenue on certain invoices. The appellant argued that the defects were curable, and they had rectified them, justifying their claim for credit. The Tribunal found no substantial reason for denying the credit based on these technical defects.

4. In the analysis of the fourth issue, the Tribunal observed that the genuine credit available should not be denied based on technicalities. The appellant's claims were found to be within the six-month period of receipt of subsequent invoices, as required by the modvat scheme. The Tribunal upheld the appellant's success on the first count of demand.

5. The fifth issue involved the denial of credit by Revenue based on technical defects, which the Tribunal found to be curable and rectified by the appellant. The Tribunal emphasized that technicalities should not hinder substantive justice, citing the principle that rules and procedures should serve the law, not act as barriers to justice.

6. Lastly, the Tribunal addressed the application of substantive justice over technicalities in the case, emphasizing that the rules and procedures should not impede the basic legislation. The Tribunal considered the appeal unproductive for remand due to the small quantum of demand involved and allowed the appeal, directing consequential relief to follow in accordance with the law.